The Impact of Corporate Governance on the Technical Efficiency of the IC Industry in Taiwan

Jwu-Rong Lin, Hsiu-Ying Lee and Li-Peng Hsiao
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Jwu-Rong Lin: Department of International Business, Tunghai University, Taiwan
Hsiu-Ying Lee: Department of Accounting, Tunghai University, Taiwan
Li-Peng Hsiao: Institute of Accounting, National Taipei University, Taiwan

Journal of Economics and Management, 2009, vol. 5, issue 1, 29-54

Abstract: The purpose of this paper is to analyze the impact of corporate governance on technical efficiency. We use the Translog stochastic production function to derive technical efficiency. Four empirical results are observed: (1) Technical efficiency has a negative relationship with the following two mechanisms: (a) the percentage of company shares owned by directors and supervisors and (b) the pledged shares ratio of directors, supervisors, and CEO duality. (2) The percentage of the company shares owned by managers makes a positive contribution to technical efficiency. (3) The percentage of the company shares owned by government has a negative relationship to technical efficiency. (4) In sum, insider ownership is unfavorable to the technical efficiency of the Taiwanese IC industry, but manager ownership is beneficial to the technical efficiency of the Taiwanese IC industry.

Keywords: corporate governance; Translog stochastic frontier production function; technical efficiency (search for similar items in EconPapers)
JEL-codes: D51 G34 (search for similar items in EconPapers)
Date: 2009
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